[Click eStock] "Samsung Electro-Mechanics, a Buying Opportunity at Low Prices... Target Price Maintained"

On the 26th, KB Securities maintained its buy rating and target price of 190,000 KRW for Samsung Electro-Mechanics, stating that "while the valuation (stock price relative to corporate value) is extremely undervalued, next year's earnings are expected to improve sufficiently."

On the same day, Lee Chang-min, a researcher at KB Securities, stated, "We maintain our top pick view on Samsung Electro-Mechanics within the information technology (IT) sector."

For the fourth quarter of this year, sales are expected to reach 2.4 trillion KRW and operating profit 162.4 billion KRW, representing increases of 4% and 47% respectively compared to the same period last year, in line with the market consensus. The researcher said, "a favorable exchange rate trend is anticipated," adding, "Although IT sales will decline due to inventory adjustments by client companies, demand centered on artificial intelligence (AI) servers will continue to be strong, leading to relatively favorable results for the off-season." If the domestic economy in China recovers, the earnings improvement trend could gain further momentum.

He also emphasized that the stock price is in an undervalued range. The researcher noted, "The recent price drop is excessive compared to the solid fundamentals. It has fallen 21% over the past three months," and added, "This is seen as a buying opportunity at a low price." He further stated, "Next year's expected price-to-earnings ratio (PER) is 11.1 times, which is lower than competitors," and added, "Although IT demand, which accounts for a large portion of sales, has recently been sluggish, next year the full-scale expansion of on-device (embedded) AI is expected to enable sales volume growth."